Facebook Running Out Of Cash?

Some say Facebook is running out of cash. Good. Maybe now the social network will buckle down and take some of the money Madison Avenue wants to throw its way in order to reach the site's 120 million active users.

This week, for example, Starbucks paid to use a modified version of Facebook's calendar tool to promise US users free coffee if they vote. That kind of "branded experience" is a sign that Facebook might finally be finding ways to use its assets in a way few other sites can.

The problem with Facebook, after all, hasn't been advertiser demand, it's been the site's inability to supply marketers a compelling advertising product.

Since the Beacon fiasco, Facebook has tried to sell brand advertisers on a Google-esque automated ad buying process--in part because investors expect Facebook to eventually turn in Google-esque revenues.

Facebook won't produce these revenues, and it's unlikely that Facebook will be able to automate the sales process. But a top interactive agency exec told me last month that Facebook could make more than a few bucks -- think primetime ad rates -- selling what Madison Avenue likes to call "branded experiences":

Facebook needs to come up with ways for advertisers to be seen as providing new functionality on Facebook itself. By way of analogy, my source told me to imagine American Express sponsoring a normally congested toll road for a day. Drivers approaching the toll booths would see them empty and maybe billboard that read: "No toll today. Drive on through and see what it's like to be an American Express cardholder." Facebook should encourage users to feel like a site improvement was brought to them by a brand. Maybe Facebook's Video application should have been sponsored by Sony's CyberShot line, for example.

Nicholas Carlson
From: www.alleyinsider.com